Tag: dips

Shares of Alibaba dipped just before market close Monday following a Wall Street Journal report citing President Michael Evans’ concerns about an economic slowdown in China. “China has slowed down,” Evans said during a presentation at the National Retail Federation’s annual conference, according to the Journal. Evans’ warning comes less than two weeks after Apple CEO Tim Cook cited headwinds in China as the main cause of a rare revenue shortfall for Apple. Alibaba in particular, with its global

Shares of Alibaba dipped just before market close Monday following a Wall Street Journal report citing President Michael Evans’ concerns about an economic slowdown in China.

The stock closed 1.35 percent down after trading up for most of the day.

“China has slowed down,” Evans said during a presentation at the National Retail Federation’s annual conference, according to the Journal. “As a $13 trillion economy, it would be quite unusual if it could continue to grow at 7 percent or 8 percent.”

Evans attributed the pull back in the Chinese economy to “natural causes” as well as ongoing trade tensions with the U.S., the newspaper reported.

Evans’ warning comes less than two weeks after Apple CEO Tim Cook cited headwinds in China as the main cause of a rare revenue shortfall for Apple. The country has emerged as something of a pain point for some of the world’s largest companies.

Alibaba in particular, with its global e-commerce business rooted firmly in both China and the U.S., stands to suffer from continuing trade challenges.

The stock market is likely to remain highly volatile, but the economy is unlikely to fall into a recession and that makes it a good time to “buy the dips” again when stocks fall, said Jim Paulsen, chief investment strategist at Leuthold. They don’t tend to get super deep and they tend to reverse. Paulsen agrees with many Wall Street forecasts that 2019 will see a slower pace of growth in the low 2 percent range, but no recession. “On days when it’s really dying, it’s a good time to buy … on da

The stock market is likely to remain highly volatile, but the economy is unlikely to fall into a recession and that makes it a good time to “buy the dips” again when stocks fall, said Jim Paulsen, chief investment strategist at Leuthold.

“If there’s no recession, to me it’s a buyable correction. They don’t tend to get super deep and they tend to reverse. The whole key is the recession,” he said in a telephone interview.

Paulsen agrees with many Wall Street forecasts that 2019 will see a slower pace of growth in the low 2 percent range, but no recession.

“That’s one of the reasons I’m bullish again here. I’m betting we don’t have a recession. I think if we didn’t see the low, we saw something pretty close to it,” he said. “On days when it’s really dying, it’s a good time to buy … on days, when it’s rallying hard, just stand pat. That’s what I would look at doing.”

The S&P 500’s closing low was 2,351 on Monday, after a sharp drop in the half-day Christmas Eve session, giving it a 19.8 percent decline from its September high. Since Monday, it has swung hard in both directions, but was up about 3 percent for the week as of Friday morning.

“I think sometime in 2019, if you buy down here in this area, you’ll probably be happy,” he said.

The Nasdaq Composite entered bear market territory Thursday as Wall Street sold off pricey technology stocks amid steep valuations, increased regulatory concerns and fears of slowing economic growth. It finished the day just under that level, down 1.6 percent for the day and 19.7 percent from its record. Amazon, Apple, Netflix and Alphabet, which drove the gains in the Nasdaq during the bull market, were all lower on Thursday. Those names are all already in bear market territory individually, do

The tech-heavy benchmark lost nearly 3 percent at its low of the day, bringing its losses to more than 20 percent from a record reached at the end of August. It finished the day just under that level, down 1.6 percent for the day and 19.7 percent from its record.

Amazon, Apple, Netflix and Alphabet, which drove the gains in the Nasdaq during the bull market, were all lower on Thursday. Those names are all already in bear market territory individually, down more than 20 percent from highs.

Apple is down 32 percent from its latest high. Amazon is off by 29 percent from its record. At their peaks, both were worth more than $1 trillion in market value. On Thursday, both lost more than 2 percent.

Even Microsoft, which had held up better than other big tech recently, was getting hit on Thursday. The stock was down 2 percent, bringing its decline from its 52-week high to 12 percent.

“It’s been a bear market for a little while now, whether it’s been reflected in Russell 2000 or the Nasdaq,” said Steven DeSanctis, a Jefferies equity strategist. “We’ve seen sectors like energy, financials and some consumer names that have been absolutely beaten up. It’s pretty broad-based.”

Investors were quick to abandon the tech household names in part thanks to how expensive technology stocks had become over the past year. Traders bought up such stocks throughout 2017 and into 2018 amid a swell in demand for chips and an acceleration in revenues at Facebook and Amazon that promised companies some of the best advertising exposure available.

But an uptick in borrowing costs and heightened regulatory scrutiny has trimmed the buoyant income outlook for the sector, which often borrows cash to fuel innovation or content purchasing. Facebook stock, for instance, fell more than 30 percent over the past six months as a string of data privacy reports and subsequent federal hearings threw the social media giant into the limelight. Facebook actually finished Thursday higher, but is down 38 percent from its 52-week high.

“People are really worried about 2019 outlook and what earnings numbers are going to be,” DeSanctis added. “Earnings numbers are coming down for 2019. Companies are able to manage around higher interest rates, which slow down their business, but the tariffs add an additional cost. So companies are really going to take a step back and not spend a lot of money initially in 2019.”

Apple also faced revenue concerns this quarter after it told investors that it will no longer disclose iPhone unit sales when it reports financial results, raising fears that sales of the iconic smartphone may have peaked. Many analysts and shareholders, who had used the quarterly phone sales figures as a quick gauge of the company’s income health, said they were disappointed with Apple’s choice to withhold the information.

Brent crude prices slipped on Monday amid concerns over demand in the wake of weaker growth in major economies, while U.S. oil markets held steady after U.S. drilling activity fell to its lowest level in about two months. International Brent crude oil futures were at $60.16 per barrel at 0248 GMT, down 12 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $51.33 per barrel, up 13 cents, or 0.3 percent. But oil prices were supported after Genera

Brent crude prices slipped on Monday amid concerns over demand in the wake of weaker growth in major economies, while U.S. oil markets held steady after U.S. drilling activity fell to its lowest level in about two months.

International Brent crude oil futures were at $60.16 per barrel at 0248 GMT, down 12 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $51.33 per barrel, up 13 cents, or 0.3 percent.

Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, while the country’s industrial output rose the least in nearly three years as the economy continued to lose momentum.

French business activity plunged unexpectedly into contraction this month, retreating at the fastest pace in over four years, while Germany’s private sector expansion slowed to a four-year low in December.

But oil prices were supported after General Electric Co’s Baker Hughes energy services firm said on Friday that U.S. drillers cut four oil rigs in the week to Dec. 14, pulling the total count to the lowest since mid-October at 873.

“This, when combined with (expectations) Saudi Arabia is … to cut exports to the United States to draw down inventory builds (there) should provide a short-term base despite global slowdown fears, which continue to resonate,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

However, the current U.S. rig count, which serves as an early indicator of future output, is higher than a year ago when 747 rigs were active.

The Organisation of the Petroleum Exporting Countries and its Russia-led allies have agreed to curb output from January, in a move to be reviewed at a meeting in April. Saudi Arabia is OPEC’s de facto leader.

“The potential for a significant movement in the U.S. dollar clearly has an impact on oil pricing with the Fed meeting (this week). We’re looking outside the oil markets for its next major move,” said Michael McCarthy, chief markets strategist at CMC markets.

The U.S. Federal Open Market Committee (FOMC) is set to start a two-day meeting on Tuesday.

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion. Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce. “Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures. The dollar declined against the safe-haven yen as a spike in risk aversion pressured equitie

Gold edged higher on Thursday as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion.

Spot gold was up 0.2 percent at $1,239.86 per ounce, as of 0429 GMT, while U.S. gold futures were 0.2 percent higher at $1,244.9 per ounce.

“Markets are trying to consolidate, trying to push up higher for now,” said Benjamin Lu, a commodities analyst with Phillip Futures.

A balance between a host of factors such as a rate hike by the U.S. Federal Reserve in December, uncertainty about trade tensions between Washington and Beijing, and a flattening yield curve has helped create a premium for the bullion, Lu added.

Fed policymakers will gather at a Dec. 18-19 meeting, at which the central bank is widely expected to raise interest rates.

“Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate hike timings in 2019,” said Lukman Otunuga, a research analyst at FXTM, adding that: “if the meeting echoes a similar message to (Chairman Jerome) Powell’s dovish shift, gold has the potential to shine into 2019.”

The dollar declined against the safe-haven yen as a spike in risk aversion pressured equities and U.S. Treasury yields. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates.

“An yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it’s going to be very positive,” Phillip Futures’ Lu said.

Spot gold may test a resistance at $1,245 per ounce, a break above which could lead to a gain into a range of $1,253-$1,258, according to Reuters technical analyst Wang Tao.

Meanwhile, palladium continued to be more valuable than gold after outshining the yellow metal for the first time since 2002 on Wednesday, with prices soaring by around 50 percent in less than four months to record levels.

Spot palladium rose 0.1 percent to $1,245.00 per ounce, hovering near its record high hit in the previous session.

The market now awaits Friday’s U.S. non-farm payrolls data for November, which is expected to show unemployment remains at 3.7 percent.

“Investors are seen adopting a cautious stance ahead of the U.S. jobs report which could offer insight over the health of the U.S. labour force,” said FXTM’s Otunuga.

Amongst other metals, silver fell 0.7 percent to $14.41 per ounce, while platinum extended losses into a third session, declining 0.7 percent to $795.00 per ounce.

The dollar fell against the yen on Thursday as growing investor aversion to riskier assets hit equities and pushed down U.S. Treasury yields. Global equity markets have been shaken and the dollar fell this week after an inversion in a part of the U.S. Treasury yield curve triggered market concerns about economic growth. U.S. Treasury yields fell, pressuring the dollar. “Lower Treasury yields are driving the dollar lower against the yen. The euro lost 0.42 percent to 127.85 yen, the Australian do

The dollar fell against the yen on Thursday as growing investor aversion to riskier assets hit equities and pushed down U.S. Treasury yields.

The U.S. currency dropped 0.45 percent to 112.68 yen, handing back its modest gains made overnight.

Global equity markets have been shaken and the dollar fell this week after an inversion in a part of the U.S. Treasury yield curve triggered market concerns about economic growth.

Adding to the jitters on Thursday was the arrest in Canada of a top executive of Chinese tech giant Huawei Technologies, fanning fears of a flare-up in tensions between China and the United States just as the two sides are supposed to be resuming trade negotiations.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.93 percent and Japan’s Nikkei lost more than 2 percent.

U.S. Treasury yields fell, pressuring the dollar.

“Lower Treasury yields are driving the dollar lower against the yen. It is difficult to pinpoint how much funds investors have transferred from equities to bonds in the recent risk aversion and it is too early to call a bottom for Treasury yields,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

The 10-year Treasury yield last stood at 2.8829 percent.

Signals from the Federal Reserve last week that it may be nearing an end to its three-year rate hiking cycle have helped trigger the slide in Treasury yields.

The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates.

A flatter curve is seen as an indicator of a slowing economy, with lower longer-dated yields suggesting a potential recession down the road.

“The dollar could remain under pressure until this month’s Fed meeting as long-term Treasury yields may not be able to mount a rebound until the market sees the Fed’s stance on policy and the economy,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“The recent reaction to the U.S. yield curve inversion appears a little hysterical, but the dollar will not be given the all clear sign until the Fed meeting is hurdled.”

Fed policymakers are still widely expected to raise interest rates again at their Dec 18-19 meeting, but the market focus is on how many rate hikes will follow in 2019.

The yen, often sought in times of market unrest, made strides against other peers as well.

The euro lost 0.42 percent to 127.85 yen, the Australian dollar slumped 1.02 percent to 81.44 yen and the pound fell 0.55 percent to 143.33 yen.

The euro was little changed at $1.1346 after retreating from this week’s high of $1.1419 scaled on Tuesday.

The Australian dollar, sensitive to swings in risk sentiment, was down 0.58 percent at $0.7226.

The Aussie was already on a shaky footing after shedding nearly 1 percent the previous day on weaker-than-expected third quarter Australian gross domestic product data.

The pound was a shade lower at $1.2723.

Sterling had sunk to a 17-month low of $1.2659 at one point on Tuesday after parliamentary setbacks for Prime Minister Theresa May.

Euro zone inflation slowed as expected in November, while core inflation readings were below market expectations, supporting European Central Bank policymakers who favor a cautious exit from monetary stimulus. Indeed, Eurostat said that energy prices rose by 9.1 percent year-on-year, from 10.7 percent in October, while unprocessed food prices were up 1.8 percent, from a 2.1 percent increase last month. Another core inflation reading often watched by economists, which removes all food, energy, al

Consumer prices in the 19 countries sharing the euro rose by 2.0 percent year-on-year in November after a near six-year high of 2.2 percent in October, EU statistics agency Eurostat said on Friday.

The decline matched the average expectation in a Reuters poll of economists.

Headline inflation has been at or above the ECB’s target of almost 2 percent for months, but the bank has downplayed the risk of an overshoot, arguing that underlying trends remain weak and only volatile energy costs are pushing up consumer prices.

Indeed, Eurostat said that energy prices rose by 9.1 percent year-on-year, from 10.7 percent in October, while unprocessed food prices were up 1.8 percent, from a 2.1 percent increase last month.

Inflation excluding those two volatile components — the core indicator that the ECB watches in its policy decisions — also fell, to 1.1 percent from 1.2 percent in October, against expectations of a slight increase.

Another core inflation reading often watched by economists, which removes all food, energy, alcohol and tobacco prices, also dropped to 1.0 percent. Forecasts were for it to be unchanged at 1.1 percent.

Both indicate that record employment and rising wages have yet to fully feed through to prices.

The ECB still plans to end its 2.6 trillion euro ($2.96 trillion) bond purchase scheme next month, arguing that inflation is now well on its way to the target and the euro zone economy will continue to expand even with reduced support.

But it also expects to maintain an oversized balance sheet for years to come and interest rates at record lows at least through next summer to keep monetary policy highly accommodative for an extended period.

The ECB now expects inflation to average 1.7 percent through 2020 but an oil price drop of more than 30 percent since early October has raised downside risks to its projections.

The bank will next meet on December 13 and investors expect it to reaffirm its policy stance and to detail how it will use cash from maturing bonds to keep borrowing costs low.

Eurostat’s flash estimate does not include a month-on-month calculation.

The yield on the benchmark 10-year Treasury note dipped under 3 percent Thursday morning after Federal Reserve Chairman Jerome Powell said he believes interest rates are close to a neutral level. Treasurys rallied overnight, with the 10-year yield touching 2.995 percent; the rate was last seen at 3.021 percent at 7:19 a.m. The yield on the 30-year Treasury bond slipped to 3.311 percent and the 2-year inched lower to 2.794 percent. In Powell’s speech on Wednesday he said that he sees the Fed’s be

The yield on the benchmark 10-year Treasury note dipped under 3 percent Thursday morning after Federal Reserve Chairman Jerome Powell said he believes interest rates are close to a neutral level.

Treasurys rallied overnight, with the 10-year yield touching 2.995 percent; the rate was last seen at 3.021 percent at 7:19 a.m. ET. The yield on the 30-year Treasury bond slipped to 3.311 percent and the 2-year inched lower to 2.794 percent. Bond yields move inversely to prices.

In Powell’s speech on Wednesday he said that he sees the Fed’s benchmark interest rate to be near to a neutral level; which marks a change from comments made in previous months.

In October, the Fed chair stated that the U.S. was a “long way” from hitting neutral, when it came to interest rates — which suggested to markets that more rate hikes were on the horizon. Following Powell’s comments on Wednesday, short-term Treasury yields came under pressure.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy — that is, neither speeding up nor slowing down growth,” Powell told the Economic Club of New York.

Powell’s address followed that of Fed Vice Chair Richard Clarida, who on Tuesday said that interest rates are “much closer” to a level that neither stimulates nor restricts growth.

A growing number of central bank officials, including Powell and Clarida, have emphasized the importance of the Fed’s reliance on financial data when considering further increases to the federal funds rate. Weakness in financial markets — both in the U.S. and overseas — have led some investors to wonder whether Fed members may temper the pace of their rates hikes.

Tepid inflation, a plunge in oil prices and subsiding effects from President Donald Trump’s tax cuts have also added to concerns that the robust economic growth in the U.S. over the past year may be coming to a end. That could influence Fed policymakers, who may be less apt to hike borrowing costs if gross domestic product growth slows.

Gold fell on Friday as the dollar strengthened ahead of the trade talks between the U.S. and Chinese leaders at the G20 summit, while palladium prices crossed the key $1,200 per ounce mark for the first time. Spot gold fell 0.17 percent to $1,221.01 per ounce. U.S. gold futures slipped 0.31 percent lower to $1,226.70 an ounce. Gold prices have been trading between $1,210.65 and $1,230.07 over the past two weeks. Until the fundamental story changes, we are going to see very strong palladium price

Gold fell on Friday as the dollar strengthened ahead of the trade talks between the U.S. and Chinese leaders at the G20 summit, while palladium prices crossed the key $1,200 per ounce mark for the first time.

U.S. President Donald Trump and his Chinese counterpart Xi Jinping will be meeting on Saturday on the sidelines of the G20 summit in Argentina to discuss the ongoing trade dispute between the world’s two biggest economies.

“The dollar index has moved to its daily high and the U.S. stock market is bouncing back and that is also working against gold,” said Kitco Metals senior analyst Jim Wyckoff.

A big price movement is unlikely in gold for the rest of the session “unless there is some kind of a major announcement from out of Buenos Aires from G20,” he added.

The dollar index, which measures the greenback against a basket of six major currencies, recouped losses, having touched a near one-week low in the previous session, as markets awaited the outcome of the talks.

“The markets now have more clarity into issues such as the U.S. Federal Reserve’s interest rate thinking, the Italian budgetary drama, and the U.S.-China trade war,” said Ronan Manly, a precious metals analyst at Singapore-based dealer BullionStar.

“As such, this clarity and visibility could cap any further gains for gold in the short term. So, a major move above the current range is not likely.”

Gold prices have been trading between $1,210.65 and $1,230.07 over the past two weeks.

Meanwhile, palladium dropped 0.02 percent to $1,180.75 per ounce, having soared to a record high earlier in the session, and moving above the key $1,200 an ounce level for the first time ever, putting it just about $15 shy of parity with gold.

“There is lot of tightness of palladium physical metal supply that’s translating into a fundamental support in strong palladium price,” said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

“The investors and speculators are driving the prices higher. Until the fundamental story changes, we are going to see very strong palladium prices.”

Spot silver fell 1.15 percent to $14.14 per ounce.

Platinum dipped 1.90 percent, to $801.50 per ounce, on track for a fourth consecutive weekly decline. The metal is set to fall more than 4 percent in November, after gaining in the previous two months.

The German economy is cooling down. That is the standout assessment from a key business climate survey, published by the Munich-based Ifo Institute on Monday. The Ifo Business Climate Index fell to 102.0 points in November from 102.9 points in October, marking its third consecutive decrease. Speaking to CNBC’s “Street Signs” shortly after the release, the institute’s president, Clemens Fuest, said sentiment among German businesses had obviously weakened as activity had slowed. “There are clear s